Update on US Markets
Equities retreated this past Friday with the Dow Jones and the NASDAQ both dropping 1.3% and the. The S&P 500 also showed weak performance, ending down 1% for the week, and setting a record for the longest period (33 days) the index has not set a new record since June 2013. Some corporate earnings were disappointing, while at the same time cost of living rose. Additionally uncertainty from the Fed regarding rates and trouble abroad in Europe and Asia have also increased headwinds for domestic equities. Economic data on industrial output and retail sales this week proved weaker than forecasted.
Update on Chinese Markets
China has recently enacted rules to rein in margin trading on its exchanges. As a result a number of US ETFs which track Chinese stocks saw a pullback last week as investors expected losses on the forced exit of some levered positions. A representative Bloomberg index posted a loss of 1.4%. These losses come after strong Chinese equity performance, the Shanghai and Hong Kong stock indexes had been up 23% over the trailing thirty days. On the whole, investors expect this pullback to be temporary as the fundamentals underlying the equities themselves have not been changed.